+1 to the above comments.

Governments that do this are either clueless or thugs. The market doesn't need their money, they need them to define a fair playground and that especially means defining how the state behaves.

>Governments that do this are either clueless or thugs.

See hogFeast's comment:

https://news.ycombinator.com/item?id=21165893

You've basically dissed the governments of the US, the UK and the EU, plus every country mentioned in the SCMP report that Malaysia feels it has to keep up with. Good job.

My main experience is with Romania where any such project of encouraging incorporating, giving grants, etc are just excuses at spending money, badly. I would make these illegal. Perhaps other governments are better at managing money.

Maybe even in a place where things don't work very well the state can still manufacture startups because these companies will get the red carpet from every other institution. They are not representative of the overall economy.

>My main experience is with Romania

Fair enough, that would explain your reaction. To be fair, Malaysia is more like Romania than some of the other countries I've mentioned.

>just excuses at spending money, badly

Yes, and funding startups is just about the perfect excuse, because new businesses often fail. However, the SCMP report also said the government has been giving grants to startups for some time now. Grants to small businesses is something that a lot of governments engage in: it's about trying to create jobs.

>Perhaps other governments are better at managing money

Nah. Other governments just behave better. Funding new businesses is always a "bad" way of spending money, in that most new businesses fail, and nobody has a good way of figuring out which ones will.

>the state can still manufacture startups because these companies will get the red carpet from every other institution.

They may get some prestige, but I'm sure a lot of startups fail eventually.

> >the state can still manufacture startups because these companies will get the red carpet from every other institution. > They may get some prestige, but I'm sure a lot of startups fail eventually.

Yes, but you are underestimating the ways the state itself may "help" a company fail. Ever had all your accounts blocked for an accounting misunderstanding of $500? Had the state not pay back the money they owe you while they wait on the statute of limitations or companies suing them? Delay VAT refunding thereby reducing your cashflow?

>>>the state can still manufacture startups because these companies will get the red carpet from every other institution.

>Yes, but you are underestimating the ways the state itself may "help" a company fail.

Yes, but this also undermines your point that government-manufactured startups will necessarily get red-carpet treatment.

Like I've said earlier, Malaysia is more like Romania, and the examples you've listed are peanuts compared to the kind of shenanigans you can get in Malaysia.

I mean, this is a country whose PM is a nonagenarian who's made a spectacular political comeback [0], after having defeated his protégé [1] and his former party [2], and who's known for sending another protégé to jail on sodomy charges.[3] It's also a multi-ethnic country where the privileged status of the majority ethnicity is constitutionally protected[4] and backed by active affirmative action policies.[5]

Which is why there's so much skepticism in this thread about the whole thing.

[0] https://en.wikipedia.org/wiki/Mahathir_Mohamad

[1] https://en.wikipedia.org/wiki/Najib_Razak

[2] https://en.wikipedia.org/wiki/United_Malays_National_Organis...

[3] https://en.wikipedia.org/wiki/Anwar_Ibrahim_sodomy_trials

[4] https://en.wikipedia.org/wiki/Article_153_of_the_Constitutio...

[5] https://en.wikipedia.org/wiki/Bumiputera_(Malaysia)

What about the US government funding of Fairchild Semiconductor by purchasing chips from it?

What about the US government funding of Palantir via In-Q-Tel?

At least in those cases they’re eating their own dog food. They’ll have customer expectation on the startup they’re financing, and they know there’s a market, and the company will be able to deliver ( not to mention the fact that those are fields on the border of national security, which means you can’t just rely on private companies on the market)

In most cases, they're hoping they can take a shortcut and avoid all the long, slow, and most importantly boring-to-voters work of setting the scene for a healthy ecosystem.

> it makes them feel good,

In more ways than one would naively assume, I'm sure. Every time a government starts such initiatives to spend a lot of money, some officials will be making plans on how to benefit from it.

The sane, clean way to help startup funding is to incentivise it with tax benefits for investors.